Monday 25 February 2013
Wherefore the Pound now?
Now here is an excellent article. The world of forex trading is relatively alien to me. Everyone I know who does it professionally seems to work on the basis that you need a few millions to punt with and then try and take a tenth of a percent a day here and there and somehow make your self rich. It always sounded remarkably hard to me - although I am yet to meet a poor FX broker which suggests there know something I don't.
Also FX Trading lends itself well to technical analysis of charts - which is all very well and good but not one of my stronger points; my strategies in trading tend to be more focused around event driven moments.
However, as the link shows, perhaps now is one of those moments. With the AAA downgrade likely to have an impact on economic prospects, the most obvious suggestion is to say that the pound will fall further.
However, a glance at the various charts proves this to be unlikely, the fall has already bee fairly precipitous and the idea that somehow the Euro is a long-term stronger option that the Pound must be ludicrous given the contradictory strains present within the European Union.
The entire markets too are long on the Norwegian Kroner and Aussie Dollar (tipped here years ago as the place to be, of course), which will be positions unwound one day along with the Swiss Franc.
So there we go, everything in place for a contrarian bet and the pound to make a steady recovery...anyone buying this?